HMV at risk as it goes into administration

Up to 4,000 jobs are now at risk as struggling HMV becomes the latest casualty of the high street.

Accountants Deloitte have been called in to take control of the finances while a new buyer is sought.

HMV said in a statement: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect.

"The directors of the company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business."

HMV have been hit hard by Internet firms such as Amazon, who offer the same products but cheaper, while CD sales have dropped in the wake of iTunes.

Sales dropped by over 10 per cent in six months last year, with shares tumbled 39 per cent after the dismal results were published, giving the retailer a market value of just £10.1 million.

Suppliers including Universal Music came to HMV's rescue at the start of 2011 with a deal which helped the retailer shed some of its huge debt pile.

Its struggle has seen it sell off several parts of its business, including the Waterstones book retailer, to reduce its debt pile, while closing loss-making stores.

HMV also offloaded its Hammersmith Apollo venue for £32 million, which enabled it to thrash out a new deal with lenders.

If the company does close, it will bring an almost total end to specific entertainment stores on the high street, with mainly supermarkets and independent shops selling DVDs and music.